Enterprise Africa / E&C Charcoal December 2020

E&C CHARCOAL

E&C CHARCOAL Balancing Export and Local Markets

Assists KZN Manufacturer PRODUCTION: David Napier

Big braais with large numbers of family and friends might still be a way off in South Africa, but as the country turns the corner from relief to recovery, Pietermaritzburg-based charcoal manufacturer E&C Charcoal is still producing great products to help light up the barbecue and cook fantastic food this summer. www.enterprise-africa.net / 3

INDUSTRY FOCUS: MANUFACTURING

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Summer is here and as the weather changes, the sun shines harder and hotter, South Africans pick up the tongs and uncover the BBQ – it’s time to braai. Of course, many don’t stop cooking over flame all year round, but when the sun is high and the temperature rockets, many are quickly moved outside for a season of chargrilled delight.

But with the turmoil induced by a global pandemic that has been ongoing for nine months and counting – and still raging in many parts of the world – this summer is set to look different to perhaps all that we have known before.

While President Ramaphosa stated at the start of November that the country was on the road to recovery from a health perspective, the economic picture remains ugly.

Shrinking by 7.8% in 2020, GDP

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// THE WELL-ESTABLISHED RELATIONSHIPS IN THE ABOVE EUROPEAN COUNTRIES GIVE E&C CHARCOAL SUBSTANTIAL MARKET DIVERSITY // in South Africa has been decimated by the Covid-19 outbreak and subsequent lockdown. Manufacturing in particular has been hit hard.

Retailers have been happy to support the population during lockdown, but with employment creeping even higher, and spending ability diminishing, non-essential products have been downgraded on the shopping list.

When it comes to the braai, despite its deep tradition in South African culture, consumers are being forced to make difficult choices and eventually something may have to give.

For E&C Charcoal, a leading South

African manufacturing and export business, the fact that the country has achieved around 92% recovery from Covid-19 brings hope that positivity might be cooking up this summer.

WELL-ESTABLISHED Founded in 1976, E&C Charcoal has always focussed on this important product, used in cooking and as a fuel. Headquartered for the past 44 years in Pietermaritzburg, the company supplies branded products for South Africa’s big retailers. The likes of Spar and Woolworths have been long time clients, and exports to Europe and the Middle East have been brand boosting for this local manufacturer.

Chief in the company’s strategy is quality and sustainability. FSC (Forest Stewardship Council) certified, E&C Charcoal uses timber from manmade, commercial plantations that are regenerated. The company does not use wood from endangered or protected forests and every tree that falls for production is replaced.

Wattle and eucalyptus are the main inputs, and the saying of ‘the harder the wood, the better the charcoal’, is certainly supported by E&C Charcoal which ensures its raw materials are hard and high quality, producing a premium product.

“E&C Charcoal is Africa’s largest manufacturer and exporter of superior charcoal, briquettes and lumpwood, having twice won the highly prestigious State President’s Award for export achievement,” the company states. “Apart from the South African market our products are also in demand internationally and nearly half is exported to almost every European country, due to our reputation for quality, service and reliability.”

E&C CHARCOAL

RESTAURANT GRADE In 2016, annual production of Charcoal briquettes was around 12,000 tons, and lumpwood charcoal was around 8000 tons, requiring 40,000 tons of timber. The company was also preparing a new product range – restaurant grade charcoal, which lights very quickly, has no smoke, achieves highest heat, and has almost zero ash after cooking.

Leftovers can also be reused. This represented a return to more of a high-quality charcoal product which had been edged out of the market because of its higher price. But with a renewed focus on quality of food and ingredients, and investments into highly efficient modern barbecues, European customers in particular started to warm up to the idea of restaurant grade charcoal. At

the time, a Dutch customer of E&C Charcoal introduced the product with “astonishing results”.

For export, E&C Charcoal is well-placed. With close links to international trade corridors, the company is able to ship product worldwide very quickly.

“Situated 30 kilometres from a major national road and 120 kilometres from Durban, Africa’s largest port, we are well-suited to supply the local and export markets,” the company states. “With this location and an abundance of timber, we have grown into Africa’s largest manufacturer of lumpwood charcoal and charcoal briquettes. E&C Charcoal currently exports both lumpwood charcoal and charcoal briquettes to Sweden, Norway, Denmark, Germany, the

Netherlands, Belgium, Switzerland and France, as well as across the channel in the United Kingdom.

We also have markets in the Mediterranean countries of Greece and Israel.”

Charcoal is relatively easy to export and complements shipments of other exports as container and freight companies look to fill space and maximise capacity with exactly this type of product.

“The well-established relationships in the above European countries give E&C Charcoal substantial market diversity. The exported charcoal is a finished product; packaged and palletised for display and sale in retailers.

Other than distribution costs, there are no further expenses incurred in Europe,” the company says.

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INDUSTRY FOCUS: MANUFACTURING

// THE UTILISATION OF PRODUCTION CAPACITY BY LARGE MANUFACTURERS WAS 72.9% IN AUGUST 2020 COMPARED WITH 80.3% IN AUGUST 2019, A DECREASE OF 7.4 PERCENTAGE POINTS //

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ACTIVATED CHARCOAL A key use for charcoal, especially in Europe – going beyond that of food preparation – is in air purification.

Activated charcoal is created by heating regular charcoal in the presence of certain gases, creating pores within. These pores capture chemicals from air and the process has been developed to make the use of activated charcoal very efficient. For E&C Charcoal, this market continues to offer up major opportunities.

As demand for this product increases, Africa as a whole could benefit from export opportunities but those companies that are FSC certified and work to proven environmental standards will be first in line. Currently, around 90% of wood consumed in Africa is used for wood fuel and charcoal (East Africa 94%, North Africa 96%, Central Africa 87%, South Africa 49%, West Africa 92%). Africa’s multimillion-ton charcoal industry is a multibilliondollar industry at the point of sale, with Nigeria, Ethiopia, South Africa, the DRC and Ghana among key manufacturing countries.

Of course, key in the continued growth of this rural job-creating industry is the ongoing ability of manufacturers to operate restriction free, and the demand from retailers in a tough trading environment.

Pre-Covid-19 South Africa’s economy was on a knife edge and this is why E&C Charcoal is very happy to be operating in the export market.

According to Stats SA, manufacturing as a whole was down year-on-year in August. “The utilisation of production capacity by large manufacturers was 72.9% in August 2020 compared with 80.3% in August 2019, a decrease of 7.4 percentage points,” the government body stated. “All of the manufacturing divisions showed decreases in utilisation of production capacity in August 2020 compared with August

E&C CHARCOAL

2019. Wood and wood products, paper, publishing and printing decreased by 10.1 percentage points.”

However, manufacturing remains the country’s fourth largest industry, and a major employer. Government will not allow this vital sector to fail

// E&C CHARCOAL IS AFRICA’S LARGEST MANUFACTURER AND EXPORTER OF SUPERIOR CHARCOAL, BRIQUETTES AND LUMPWOOD //

and, despite challenges thrown up by the pandemic, economic packages to ensure important manufacturing businesses continue to operate will come into force. The largest spending plan in SA history has already been issued by Ramaphosa’s government and for many manufacturers, as this money filters into the system, the hope is that confidence can return to markets so that consumers can spend and retailers can support a tested value chain.

On the ground, braai culture is unlikely to be reduced to a memory and many will soon begin uncovering the grills. For Charles Holley, E&C Charcoal CEO, a braai remains a perfect way to relax.

“I braai probably twice a week and I don’t just use our product. I like to know what’s out there. Our focus as a company is all about quality so it’s nice to know the advantages that we have in the marketplace. I love braaing; I find it creative and relaxing – it’s great for family and friends. There’s a changing attitude towards eating and food and people want quality with everything they do so that can only be good for our business.”

WWW.CHARCOAL.CO.ZA

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